How is payment changing?
Besides new tech players disrupting the payment scene, more traditional payment methods are seeing disruption within themselves. The notion of credit card surcharges has recently come into the spotlight thanks to the Surcharge Free movement, which seeks to abolish the practice altogether.
“Surcharge Free encourages businesses to focus on the bigger picture of the customer experience,” says Christopher Zinn, consumer advocate.
“The reality is [that] the damage caused by imposing a surcharge can far exceed the costs associated with processing card payments.”
Research by Surcharge Free suggests more than 90 per cent of Australians view a lack of surcharges as important to repeat business, while 93 per cent of consumers would like surcharges removed altogether.
Yet the biggest indication that change is afoot is the finding that 75 per cent of consumers told people they know to avoid a business that surcharges.
Many businesses in the fintech space are looking to disrupt existing payment procedures. PayPal is the most well-known worldwide, but it is far from being the only system available.
For instance, Square Invoices, launched in Australia this May, gives business owners the ability to send invoices to consumers from either a smart device app or a desktop computer.
Ben Pfisterer, Square’s country manager – Australia, says that Australian SMEs experience some of the slowest invoice-payment speeds in the world.
“Research shows us that over $19 billion is locked away in outstanding invoices owed to businesses, and with 90 per cent of small business failures a result of poor cash flow, we’re proud to bring tools to Australian sellers to ensure they’ve got every way to get paid,” he says.
Square invoices can be paid through an included link, which allows consumers to pay for goods and services quickly and improves cash flow for businesses.
Another company operating in the payments space, Gold Coast-based bucqi, has combined cashless payments and loyalty programs in one offering.
Its system allows invoices to be paid via smartphone, which earns the customer ‘bucqs’. These bucqs can in turn be spent as dollars at bucqi-sanctioned businesses.
“Mobile payments are on the rise and brands are increasingly taking up technology that allows spenders to make purchases using just a smartphone. We’re seeing banks and supermarkets quickly jumping into this space,” explains Clive van Deventer, CEO of bucqi’s parent company Bartercard Australia.
Bucqi has already been implemented in over 200 Gold Coast stores, the most recent of which were all seven stores of the local chain Maries Pizza.
For these businesses, adapting to the technology consumers use is helping them to remain connected with their customers, encouraging repeat business.
Heading into the cloud
It’s no secret that consumers are becoming ever more tech-savvy and demanding, and now want to pay how and where they choose. Some may want to chat with an employee or find out in-depth product information, while others prefer to pay and get out as quickly as possible.
Proponents of cloud-based POS systems say this technology solves all these issues at once, allowing employees to move to the consumer and sell products via a few quick taps of a smartphone or tablet device, saving more time for a casual yarn or a mad dash out the door.
Cloud-based POS systems don’t rely on traditional cash registers but on smartphones, tablets or computers connected to online servers, with specially designed websites or apps. Data saved to these servers can be accessed anywhere a connection is available.
Simply put, cloud-based systems allow computers connected to the internet to process sales without much equipment or heavy storage requirements.
The compatibility of cloud-based POS systems with various mobile devices is one of their main points of difference from their traditional counterparts.
As transactions are processed on a smartphone or tablet, employees don’t have to stick to a specific location, such as a counter, making them more accessible to customers. Markets and roving sales are also possible using cloud-based systems.
That being said, some cloud-based POS systems can also be displayed on desktop computers, cutting out the bonus of mobility. Cash drawers and receipt printers are still used, but are connected to the computer that is used as the register.
In addition to the enhanced customer experience, business operators also benefit from accommodating fewer transaction records and less hardware in-store.
For those who aren’t tech-minded, switching over to a cloud-based POS system may be too daunting a task, and there’s always a fear that consumer data isn’t safe online (link to cyber security feature).
Ryan Murtagh, CEO of Brisbane-based Neto, an e-commerce platform that recently launched a cloud-based POS system, says the key point is that “an e-commerce merchant’s website … needs to be secure”.
Although Ryan is referring to e-commerce websites, cloud-based POS systems carry similar concerns, as consumer data is sent through the internet and saved on a server.
But despite the potential threats, the experiences of businesses using cloud-based POS systems have been largely positive.
Here, My Business speaks with two such retailers. Both use a cloud-based sales offering by Vend, a New Zealand business that started in 2010 to replace traditional POS systems with software. These are their experiences of taking their POS into the cloud.
“It’s not a question of ‘Why cloud?’, it’s ‘Why not cloud?’”
Case study 1: The global business
In May this year, Australian natural skin care business Jurlique, which started in the Adelaide Hills and now has stores in 19 countries, completed the rollout of a cloud-based POS system across all of its Australian stores.
According to Chris Balogi, director of global IT at Jurlique, cloud-based payments deliver a “win-win” solution for the business and its customers.
“Choosing a cloud-based solution has lower implementation costs [and] lower long-term investment costs … especially in retail,” Chris explains.
It also cuts down on physical hardware and saves room, he adds.
“You’ll find the storerooms in retail are very, very small, with everything chucked over everything, so you don’t want a computer sitting there.
“A cloud-based solution allows us to [use] Wi-Fi in the store, we connect to that; there’s no other hardware other than a handheld device.”
Regardless of technological developments though, Chris believes a physical retail presence will always be necessary.
“I think brick and mortar will stay, but we’ve got to be agile and we’ve got to move with technology, and we’ve got to be able to deliver what happens in the mobile space into retail and give it to our customers,” he says.
“People still like to walk into stores, people still like to see [and] touch products, they like to be consulted, they like to feel they’re being loved when they walk into a store.”
Cloud-based POS appealed to Chris as he didn’t want to lock himself in with a long-term solution.
“I didn’t want to personally invest in a long-term solution that would tie us into a physical bit of infrastructure [or a] heavyweight database for the next 10 years,” he says.
“We can’t forecast that far ahead!
“It’s not a question of ‘Why cloud?’, it’s ‘Why not cloud?’. Cheaper, quicker to implement, and you have the ability to be agile afterwards. It’s a win-win for me.”
“If you’re looking at having multiple sites and doing pop-ups as well as permanent [stores], I think it’s a must.”
Case study 2: The SME
It’s not just large businesses that have found success with the cloud, but also smaller ones like TheSuperCool.
TheSuperCool was founded in 2011, the brainchild of Kate Vandermeer and her husband David Nunez, who wanted to create a store that would represent a nomadic lifestyle.
“When we first started, we would pick different spots and pop up for a period of time, and use social media for people to find us before we had an online store as well,” Kate recalls.
“We wanted to appeal to that vintage peddler idea back in the early 1800s, where people would take their wares on their little peddler cycle-mobiles … and they’d come to different towns and make retail an event.”
Through incorporating a cloud-based POS system, Kate says the nomadic lifestyle now features even more prominently within TheSuperCool stores.
“[We now] have the ability to be more mobile within our store,” she says.
“We were definitely finding customers would walk around the store and want to engage with us, but not necessarily [want] to come back to a traditional counter.”
Before switching to a cloud-based POS system, their old software was more of a hindrance than a help, Kate says.
“It did cause problems for us in the sense that we had multiple stores at Christmas time.
“I [had] just had a baby at the time and I wanted to log in and see how the stores were performing, and I wasn’t able to. Everything, though, these days is cloud-based. If you don’t just jump in and embrace it, you’re really going to be left behind.”
However, Kate says it is important for businesses to maintain certain aspects of the traditional retailer.
“The pause point of a counter in-store allows you to connect with that customer while you’re doing the transaction, but … being able to do it quickly is advantageous,” she explains.
“I feel … the old-fashioned [way of] having a conversation with someone and engaging with them, connecting with them, and [building] that real-time relationship means they’ll come back to you, but they also equally want the speed and convenience.”
The bottom line for businesses is that cloud-based POS systems are highly beneficial, according to Kate.
“If you’re looking at having multiple sites and doing pop-ups as well as permanent [stores], I think it’s a must,” she says.
“Moving forward, there’s just never going to be enough USBs and external data [storage]. We just have to hold on to so much information and so much data, so the cloud just makes so much sense.
“If you want to be progressive, and you want to move forward and expand within your business, you definitely need to think cloud is where we’re going.”
Even with a leg-up thanks to adapting to a cloud-based POS system, Kate admits she doesn’t want to become technologically stagnant.
“You’ve just got to roll with it and stay abreast of what’s happening. We’re five years in, so we’ve got a little bit more experience now, but we’ve certainly got a hell of a lot more to learn.”
Head in the clouds or sound business sense?
Jurlique’s Chris Balogi outlines his reasons for choosing cloud-based POS systems over traditional ones:
- Off-the-shelf product
- Less infrastructure
- Less support requirements
- Lower implementation costs
- Lower long-term costs
- Enhanced customer experience